Ken Fisher: 'US stock markets good but outside America better'
Global equity markets are expected to chart a bullish course - Out of 72 forecasts, only four see a sharp decline in the US
by Ken Fisher
-U27802260775aXW-1440x752@IlSole24Ore-Web.JPG?r=650x341)
What to expect after the excellent 2025 filed by Italian and European equities? My advice is to be bullish but not euphoric. Earnings are likely to slow, although overall global equity markets should chart a bullish course, exceeding their long-term average of 10%, but remaining below the annual average of more than 22% of bullish markets. Non-US equities should still lead the markets.
At the beginning of 2025, I said that pessimism would favour positive surprises and substantial gains. And so it did! The FTSE MIB index rose 38%, while European stock markets rose 19%. As expected, US equities underperformed, rising just 3%. This development was also linked to the strength of the euro, which limited global gains to 7%. However, taking a local approach is not advisable and diversification on a global scale is essential.
Many argue that the euphoria over AI and US technology stocks has hidden a broader weakness. Not so. Five of the US 'Magnificent Seven' underperformed the S&P 500 index, which in turn underperformed the world market. Italia, which has a low technology component, achieved excellent returns. So did Austria, Spain and other low-tech countries. In Europe, banks and the industrial sector showed gains of 75% and 25% respectively; and in Italia these sectors gained 77% and 61%!
Let us now turn to the outlook for 2026. Of the 72 forecasts by professional investors that we follow, only four anticipate a decline in US equities of more than 1% in 2026 (in USD). Few, therefore, are true pessimists. Forecasts cluster around the median estimate of 9.6%. Therefore, we are not in the presence of excessive optimism either.
Consensus estimates never come true, because the stock markets discount them in advance. Consequently, there are two most likely scenarios: stocks either fall or rise more than 10%. Fundamentals favour the latter scenario. The global yield curve, which I described in July, is steep and boosts credit activity. This gives momentum to growth, leading to an overshooting of low expectations.
